Money Talks: Why weight-loss drugs will reshape the world
Apr 18, 2024
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Discover the economic impact of weight-loss drugs reshaping the world, with Novo Nordisk leading the way. Explore the challenges, market dominance, and future growth potential of these miracle drugs. Uncover the link between obesity, healthcare costs, and societal perceptions, envisioning a transformation in global economic systems. Dive into discussions on beauty standards, energy consumption, smartphone market shares, and consumer interests in physical gold bars.
The success and dominance of Novo Nordisk in the weight-loss drug market has propelled it to become Europe's most valuable company, impacting the Danish economy significantly.
Weight-loss drugs offer potential economic benefits by reducing healthcare costs associated with obesity and may lead to shifts in societal perceptions of body weight and beauty standards.
Deep dives
Economic Impact of Novo Nordisk on Danish Economy
Novo Nordisk, a pharmaceutical giant in Denmark, drives the country's economy, preventing recession and fostering growth. The company's success with weight loss drugs like Zempic and Wegovy has propelled it to becoming Europe's most valuable firm. With around 3% of Danes employed or benefiting from Novo Nordisk, the economic impact is substantial. The influence of Novo Nordisk on the Danish economy even affects currency valuation and interest rates.
Market and Future of Weight Loss Drugs
The weight loss drug market is expanding rapidly, with estimates suggesting a global market of $40 billion for such drugs. Novo Nordisk and Eli Lilly dominate this space, with the potential for one of them to become the first trillion-dollar pharmaceutical company. The scarcity of new entrants due to patents allows current major players to control the market. Despite pricing challenges and supply shortages, demand for weight loss drugs remains high.
Social and Economic Implications of Weight Loss Drugs
Weight loss drugs offer potential economic benefits by reducing health care costs associated with obesity. The direct medical care costs of obesity in the US are estimated at $300 billion annually. Indirect labor market consequences, especially lower wages for overweight individuals, highlight the broader societal impact of obesity. The availability and affordability of weight loss drugs may lead to shifts in societal perceptions of body weight and beauty standards.
Future Trends and Implications of Weight Loss Drugs
As weight loss drugs become more affordable and widely available, their impact on society and the economy is projected to be significant. The accessibility of these drugs may reshape societal norms related to body weight and appearance. With potential changes in beauty standards and signals of social status, the widespread use of weight loss drugs could lead to a transformation in how individuals perceive and prioritize physical health.
More than 1bn people around the world are obese. That means there should be extraordinary demand for drugs to cure or mitigate the condition. Novo Nordisk is now Europe’s most valuable company and Eli Lilly’s market value has more than doubled. Both make the “miracle” drugs that can help people shed up to a fifth of their body weight. But these drugs promise to do more than boost drug companies’ profits. How will they reshape the economy?
Hosts: Alice Fulwood, Mike Bird and Tom Lee-Devlin. Guests: The Economist’s Georgia Banjo; pharmaceuticals analyst Michael Nedelcovych; and John Cawley, a professor of public policy and economics at Cornell University.
Subscribers to Economist Podcasts+ can listen to our January 2023 episode on the economics of thinness.
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